The Portland real estate developer handed over control of the 539-unit two-tower project east of Seattle to Morgan Stanley Mortgage Capital, which had loaned $275 million to the project in early 2007.

The recession reached its zenith just as Gerding Edlen was wrapping up the project, scaring off potential buyers. Though the developer slashed prices by 20 percent, about 400 units remain unsold.

Ira K. Glasser, who represented the lenders in the project, said prices will be cut another 10 percent.

The Oregonian reported last spring that Gerding Edlen intended to give the disappointing project back to its lender. But the process took longer than expected and didn't close until Dec. 30, according to King County property documents.

It is the fourth high-end Gerding Edlen condo tower now under the control of its lender. The developer also lost a building in Los Angeles and the John Ross and Atwater in Portland's South Waterfront neighborhood.

The real estate bust has arguably hit the Seattle-area market harder than Portland. The downtown office vacancy rate in Seattle is about double Portland's. A number of developers also came to market with large, luxury condo towers in Seattle and Bellevue just as the financial meltdown of 2008 threw the residential real estate market deep into the doldrums.

"When this project got underway there were 17 cranes in downtown Bellevue, most of them on residential or mixed-use projects," said Glasser. "Then came the economic crunch and everything changed."

Seattle-based Schnitzer West, another developer with Portland connections, also got pinched in the Seattle market. It converted the first of its Bravern condo buildings to apartments in May and changed over the second in October.

Like the Bellevue Towers, the Bravern suffered slow sales.

Schnitzer West is bankrolled in part by the Schnitzer family of Portland.

Converting to rental units has been a common developer strategy on the reasoning that people scared off from buying during the economic storm would be more willing to rent.

Though Gerding Edlen's condo debacle cost the company and its investors a good deal of money, the firm has proven resilient. Deep-pocketed institutional investors have jumped to back the firm's green buildings venture, which hopes to remodel and retrofit existing or partially built buildings with state-of-the-art energy efficiency

In December, TIAA-CREF placed $29.8 million in Gerding Edlen's Green Cities I Fund L.P. and rumors continue to circulate in Portland that other prominent investors have committed significantly larger sums.